Posts filtered on Category

Category: Senate

People losing their homes has been a national problem, ever since the housing bubble burst, leading the country into recession. A new federal report has revealed that real estate speculation was largely to blame.

Today, we’ve come to know that the subprime credit market was corrupt. That blown up housing market burst. And while it cost speculators a lot of money, it cost first-time homeowners a lot more.

Kevin Stein studies foreclosures, and he’s become very busy over the last few years. As associate director of the California Reinvestment Coalition, he fights predatory lending practices and negotiates with banks to keep people in their homes. Stein says that he thinks lax federal oversight helped create the economic mess we find ourselves in today – that’s no surprise. But he also said, despite talk of reform, the Obama Administration still isn’t doing right by the people. KALW’s Ben Trefny asked him to lay out the problem and provide his solutions.

* * *

KEVIN STEIN: The reasons why this is occurring – the banks’ financial interest is against helping people. Or the banks are overwhelmed and never knew there would be millions of foreclosures. Or they’ve had to hire people so quickly that they have people who don’t know what the banks want them to be doing, or the people making decisions. Whatever the reason, people are suffering as a result of the system being crazy.

BEN TREFNY: What would you do to make this right, if you could?

STEIN: Well, one is around principle reduction. So there are maybe a couple million people in California who are under water. Loan servicers can modify peoples’ loans and reduce the principle so that what they owe is more in line with what the value of their house is. They are generally not doing that. We did a study of some of the areas in California under the Hamp Program. It seems like 5% of the loans include some form of principle reduction.

Interestingly, the banks, in the minority of cases, own the loans they are servicing. Usually they service loans on behalf of other investors or companies or entities. Banks seem more likely to reduce principle when they own the loan, which makes sense. As the owner of the loan, you’d rather have someone paying you a little less than not paying you at all. Which raises the question: What are they doing for the majority of loans that they don’t own? Why are they reducing principle? So what I would do is enforce a mandatory loan modification that included.

Speaking of track, another big concern that we have is the issue known as the “dual track.” The main path forward is to try to secure a loan modification so borrowers who are struggling will contact a loan service, or maybe they’ll work with an advocate to help them do that. While they’re submitting all their documents and being diligent and responsible, the banks will continue the foreclosure process. Sometimes we will hear stories of people who actually got a letter saying, “Congratulations, we are offering you a loan modification!” but it’s after they’ve already lost their home.

It’s like a race. The right hand is not knowing what the left hand is doing. So that’s the duel track. Why should we have the dual track? We had a state bill we worked on with allies last year that just focused on the dual track. It got killed in the first committee, which is the Senate banking committee.

TREFNY: Was the reasoning because the banks still need to look out for their best interest, in that if this bank loan modification doesn’t work out they still need to take action? If they slow down the process on one or the other, then they are going to end up losing money?

STEIN: I think that’s a fair representation of their interest. They want to be able to continue the process. If they say that they know how the process is going makes the borrower more responsive or more worried, we’re saying make a decision. Fully consider someone and decide. We’re not saying you have to give the modification to everybody. Based on the existing programs, decide if someone qualifies for a modification and if they do not,then proceed with the foreclosure process.

If they do give them the modification, so we don’t have people falling through the cracks, then they could have been saved. Their homes could have been saved. That’s a preventable foreclosure. We shouldn’t have that situation yet. So that’s a big problem.

In terms of what, in the real world, what should happen? There should be a new – this is maybe more than you want to know – the regulator should be better at making sure the banks do something. They should make sure the banks are accountable for at least following existing laws and rules. We need modifications that are sustainable. It can’t be voluntary. It has to be mandatory.

TREFNY: So to summarize your last point, basically: They should actually do something.

STEIN: (laughs) Yeah. Unfortunately, we have recalcitrant financial institutions that are affecting people day-to-day. Regulators that are not doing anything about it. And policy makers who seem to be afraid to change the dynamic.

It’s been a significant year for criminal justice in the Bay Area, but many of the challenges have come late in the year.

In October, Oakland lost Police Chief Anthony Batts, who resigned saying he couldn’t work in the current political climate. Days later, Oakland’s police department plunged into scandal after a raid on the Occupy Oakland encampment turned violent. Meanwhile, the state had its own share of controversy, as it planned to shift responsibility for thousands of inmates to the local level, what’s known as realignment. KALW’s criminal justice editor Rina Palta joined Holly Kernan to discuss what we can expect over the next year from the local and state criminal justice system.

* * *

HOLLY KERNAN: Alight Rina, let’s start with the local. It was a tumultuous year for Oakland. We lost a police chief, and then we saw repeated clashes between police and protestors, and now we have a petition to recall the mayor based largely on public safety issues. So how is this going to work itself out in 2012?

RINA PALTA: The first thing they’re going to have to deal with right off the bat is the federal district court. They’re going to be called in in January to account for all the issues that the police departments had over the years. And Judge Thelton Henderson is really looking to see if Oakland is able to meet its requirements under its settlement agreement. And they haven’t been able to do that so far. He’s kind of given them January as a last deadline to make things work, and he’ll undoubtedly be looking at what happened at the end of this year with Occupy Oakland, with crowd control. And I’m not sure he’s going to like what he sees.

KERNAN: And the context of this is going back to the Riders’ case?

PALTA: Right, exactly. There were some issues that were resolved between people who were bringing these accusations against the police department, and the police department itself. They agreed to basically change the way they handle crowd control, change the way they interview suspects, change the way they deal with firearms, and the district court basically said they don’t have enough progress on this issue.

KERNAN: And so what happens?

PALTA: So if they can’t display that they’ve come up to code basically by January, the judge has threatened to put them under federal supervision, direct federal supervision, which means having a receiver in charge of the department, not the police chief, not the city. And he’s threatened to do this. It’s unclear if he’ll actually follow through on that. But that’s what they’ll be talking about in January.

KERNAN: And in 2012 Oakland will certainly choose a new police chief, since former Chief Anthony Batts left in October.

PALTA: Right, so we’ll see who is mayor in 2012, if the current mayor Jean Quan can stave off this recall petition. It sounds like the people who are bringing this recall petition are people who did not like her from the beginning. I’m not sure how much support there is in her group of former supporters for recalling her. But undoubtedly, whoever is the mayor will pick whoever is police chief.

I just started talking to the mayor’s office yesterday, and they’re going to stick with Howard Jordan, who is the current interim chief indefinitely. They can do that indefinitely. They don’t have to appoint a new police chief. It’s not clear what his relationship is with Mayor Quan at this point. It’s probably not great. But they will stick with him for the foreseeable future.

KERNAN: So let’s talk about the situation at the state level where there are a lot of things going on right now. Primarily, obviously, a massive economic crisis that’s resulting in cuts to education, mental health care, and a lot of social programs. How is the budgetary system going to play out in the criminal justice arena?

PALTA: Well, there’s a lot of hope that this budgetary crisis will bring criminal justice reform in a state that’s ramping up its criminal justice system in the past few decades.

KERNAN: You mean incarcerating more people, building more prisons?

PALTA: Incarcerating more people, building more prisons, tougher sentences, people in jail for longer. And so Sacramento insiders are really saying now this is a window for change. This budget crisis is a window for change.

I spoke with Sasha Abramsky, who has covered California politics for decades. And here’s what he had to say about now being the time for reform:

SASHA ABRAMSKY: Well, there certainly is a window at the moment. People have talked about the moral inequity of a law like Three Strikes, and the arbitrary nature of these laws. A lot of people have looked at the racially disproportionate impact of many criminal justice policies. But it hasn’t generally gained a lot of traction. But you know, there’s been a willingness to give legislators the benefit of the doubt on criminal justice policies.

And now what’s happening is people are no longer giving them the benefit of the doubt. Not because there’s been a moral sea change – it’s because there’s been a financial sea change. There just isn’t the money in the system anymore. So people are looking at a bankrupted, or near bankrupted California. They’re looking at the cost of the prison system, which is about $10 billion a year.

KERNAN: Rina, how big is that window, so to speak?

PALTA: Well, one thing we talked about is the fact that this window will only involve things that involve money. So there’s going to be a lot of ballot initiatives on the ballot in 2012, probably one to end the death penalty, probably one to reform three strikes. And he predicts these ballot initiatives will be successful only to the point that people can see them as fiscal issues, not moral issues. So with the death penalty, that’s probably really tough. It’s not a big money suck. It is expensive, but it’s not on the $10 billion range that the whole prison system is.

You know, the other big issues that’s going to have a lot of impact in 2012 is how we elect our legislators is going to change a lot. Some people call it an open primary – it’s not really an open primary, but what will happen in 2012 is Proposition 14 will go into effect. That means that primaries will involve all kinds of people and the top two vote-getters from the primary will go on to compete in the general election for Assembly and for State Senate. So it could be two Democrats competing in the final election; it could be two Republicans. But the idea is probably we’ll find more moderates at the state level. And so we’ll see how that will play out in criminal justice, how it will play out in the budget, and how lobbyists will deal with this new situation at the state level.

KERNAN: The other big issue on a state level is what’s called realignment, which is counties have more responsibility for inmates. They’re not sending as many inmates to state prison. So what are people watching to see if realignment is successful?

PALTA: Sure, we’ll obviously be looking at the crime levels and whether or not those go up post-realignment. We’ll also be looking to see what each county does with the money it’s been given from the state to deal with these inmates. So there’s some problems already.

We’re hearing about some counties not putting people in jail for violating their parole so there’s no consequences for violating your parole. We’re hearing about a lot of counties that are just going to take a lot of state money and build new jails instead of putting it into rehabilitation.

So there’s all kinds of things happening all over the state, and we’re going to be watching to see what the final consequence is, if recidivism rates go down. If incarceration rates go up at the local level, there’s a lot of different things that could happen.

This is what Sasha Abramsky had to say about realignment.

ABRAMSKY: If it’s done well, it will be an exercise in creative thinking at its best. It will shrink a bloated system. It will result in a more accountable system. It might result in a low recidivism rates. It might result in better drug treatments. If it’s done badly, just as a cost-cutting maneuver, then we’re going to a whole bunch of people essentially left out on the sidelines. And that comes with a host of problems. We saw that with the de-institutionalization of the mentally ill a generation ago. The money didn’t accompany it, and it resulted in a series of rolling problems and disasters. So we have to look at where the money goes in the realignment process.

KERNAN: Looks like we will be hearing a lot more from Rina about criminal justice reform and realignment. So we’ll check in with you again soon. Thanks, Rina.

A news conference led by five Oakland city council members yesterday on the subject of removing the Occupy Oakland camp got predictably heated. Protesters shouted, “We are the 99 percent of Oakland!” Then Councilwoman Desley Brooks started her own chant with business leaders and others: “Occupy Oakland must go!” Later in the evening, Occupy Oakland protesters gathered for their general assembly meeting and withdrew a resolution calling for future demonstrations to remain peaceful… …

…

Students and teachers found out what would happen if they set up an Occupy camp at U.C Berkeley. It turns out, U.C Berkeley police will show up in riot gear, tear down your tents, and arrest at least seven people, including one professor. Apparently vice chancellor Harry LeGrande has some rough camping experiences, because he told demonstrators they could stay as long as they wanted if they didn’t use tents or cooking gear. The state cut $650 million each from the UC and California State University systems this year… …

…

Maybe if students ate less, or not at all, they’d save money they’re losing from rising tuition costs. Last Sunday, the Los Angeles Times reported that the Senate spent at least $111,316 on food for Members on session days. Yesterday, the Senate Rules Committee ruled 3-1 to change the policy so that, instead, members will pay $2000 a year to cover coffee room expenses and meals while in the house… …

…

Every year anti-war mothers must find relief when it turns out their son or daughter is too overweight to join the army. It happens often, too. One in four Americans are now too overweight to enlist in the army, according to Mission: Readiness, a group of retired military generals. Although the number of overweight schoolchildren in California has declined slightly, it’s increasing in some Bay Area counties, like Alameda and Contra Costa… …

Using marijuana is not often advised to help overweight Americans overcome their hunger, and growing marijuana on public property isn’t advised either. National Intelligence Agencies may soon help park rangers and wildlife wardens to…here it comes…weed out pot gardens. Representative Mike Thompson for California says that right now, “Wildlife doesn’t have a chance.” That’s interesting, because Governor Jerry Brown cut funding in the 2012 budget for the nearly 30-year-old marijuana eradication program creatively entitled Campaign Against Marijuana Planting… …

…

Marijuana will be just one of the issues that San Francisco’s new Mayor Ed Lee will have to tackle. Yesterday Ed Lee, who has declared himself to be a “reluctant politician”, also declared victory in San Francisco mayor’s race. He’s the City’s first elected Asian American mayor. …

In the first round of vote counting, interim San Francisco mayor Ed Lee leads the pack of 16 candidates with more than 31% of the vote…

Across the bay in Oakland, all training exercises for police next week have been canceled – meaning that Occupiers living outside City Hall will be forced to clear out. Mayor Jean Quan has already warned the camp that she will not ignore violence and the destruction of property…

Union leaders are also getting serious about Occupy. The movement has inspired organized labor all over the country to use social networking, picket lines, and nationwide marches to get their message across…

While Brown’s Pension plan stands on tenuous ground, , voters have granted Ed Lee’s pension reform plan an easy victory along with two new money measures…

Meanwhile, the Supreme Court is beginning it’s review on a law banning the slaughter of animals who can’t walk. The 2008 legislation passed after a gory video of cows being waterboarded and jabbed with forklifts was leaked…

Utilities giant PG&E has found a water leak in a pipeline in Palo Alto– the same pipeline that exploded in San Bruno…

If all this news has you hungry, just visit the Senate. They keep a fully-stocked coffee and snack room – provided by taxpayer dollars. Senators will now pay for their own food to the tune of $2,000 a year.

After Republican Rand Paul lifted his legislative hold, the Senate approved a new pipeline regulation bill, thus closing a loophole that previously exempted old segments of pipeline from rigorous safety inspections. With stronger regulations in place, officials hope to avoid disasters like the San Bruno explosion… …

…

But while Rand Paul is making political peace, two California politicians are making war. In response to a “lighthearted” tweet from mayoral candidate Leland Yee, Republican Assemblywoman Kristin Olsen personally funded 4,000 robocalls encouraging people to vote for anyone but Yee. The two have since gone back and forth accusing each other of transparency violations… …

…

Police accused Occupy SF of violating public space and raided their camp on Sunday. The raid has protesters re-energized, but relations between them and the city remain civil, for now. Trash cans, recycling and compost bins will be provided so the protesters can keep their camp clean… …

…

Proponents of clean and efficient transportation will be excited to hear that the California High-Speed Rail Authority has $6 billion of federal funding that it intends to use to build a test section of rail that would run from south of Chowchilla to north of Bakersfield. Private investors still remain wary, however, citing a lack of guaranteed revenue. The California High-Speed Rail Authority remains optimistic that once the test segment is built, riders and investors will get on board. Still, critics are concerned about how the Rail Authority will secure more funds for expansion and development of the high-speed system. …

President Obama plans on doing a town-hall meeting at the Mountain View headquarters of professional networking site LinkedIn on Monday. The forum will be an opportunity for the Commander-in-Chief to address the all-too-timely subject of jobs creation…

Although Silicon Valley tech-jobs are thriving, it isn’t all good news for Google. The company’s chairman will testify before a Senate panel today to discuss the Palo Alto-based company’s business practices. In short: Is Google a monopoly? The inquiry will cover how Google produces search results and whether it favors its own businesses and partnerships…

Speaking of government probes, local solar company Solyndra is under investigation for receiving a questionable subsidy and $34.5 million in tax breaks. Rep. Darrell Issa (R-Vista), chairman of the House Oversight Committee has some very pointed questions. The latest news suggests the now-bankrupt company will invoke the Fifth Amendment at this Friday’s inquiry…

Another company that received a large sum of government stimulus funds was Tesla Motors and the GOP apparently isn’t happy about it. Republican congressmen are calling the $465 million in low-interest loans into question…

In other million-dollar matters, former GOP gubernatorial candidate Meg Whitman has announced she’s donating $5 million to Silicon Valley Charter Schools, from her own deep pockets…

Not to be outdone, longtime Democratic Sen. Dianne Feinstein will be donating $5 million of her own, but instead of spending on schools, she’ll be spending on herself. Well, actually on her own campaign since she’s up for reelection in 2012…

Perhaps political fundraising would go down a little easier if it took place at a bar. Cocktail enthusiasts are lobbying Gov. Jerry Brown to sign a law to allow bartenders to serve drinks that include infused alcohol. A post-prohibition law bans bars from altering the liquor they serve…

And while Gov. Brown reigns over California, his predecessor, former Gov. Arnold Schwarzenegger, spoke on climate change at a United Nations forum in New York on Tuesday. The non-traditional Republican is pushing for regional governments around the world to be proactive about climate change initiatives. Schwarzenegger boasted that California was at the forefront of this movement under his governorship and claims even the Obama Administration has adopted some of his programs.